20% Market Players in China still Optimistic toward Nickel, SMM Survey

SHANGHAI, Mar. 15 (SMM) – SMM surveyed 30 market players to find that 6 are bullish, 20 are neutral and 4 are bearish.

The 20% see LME nickel rise to USD 9,000-9,200/mt. The likelihood of an interest rate hike in March by the US Federal Reserve is low given sluggish global economy. European Central Bank will unlikely lower interest rate further in the foreseeable future. China’s property sales increased during January-February, with investment picking up for the first time in two years, bolstering base metals. Yuan’s devaluation appears to have been arrested. The low Shanghai/LME nickel price ratio will curb inflows of imported nickel. China’s nickel inventories fell slightly, while nickel ore inventories at China’s ports continue to fall.SHFE 1605 nickel should climb to RMB 70,000-71,000/mt.

About 67% are neutral, seeing LME nickel hover between USD 8,700-9,000/mt. The US Federal Reserve is not expected to raise interest rate any time soon. When combined with volatility in EUR, the US dollar index slumped at one point. But the US dollar index will unlikely weaken further on strong economic indicators from the US. The euro is expected to depreciate after the European Central Bank expanded quantitative easing measures. China’s property market stabilized. Delong Nickel began to produce stainless steel, and this will tighten nickel supply. SHFE 1605 nickel should consolidate between RMB 68,500-70,000/mt.

About 13% see LME nickel fall to USD 8,550-8700/mt. Gold consolidates at highs, while crude oil prices slumped on Iran’s statement. Global economy is still in turmoil. Recent turnaround in China’s real estate market drove up base metals. But the People’s Bank of China is expected to act to rein in asset bubble. Growth in China’s industrial fell to 5.4% during January-February, the lowest since November 2008. Chinese economy is still facing pressure. Besides, smelters and NPI plants intend to restart production as nickel prices rally. With further capacity releases, nickel prices should be weighed down. SHFE 1605 nickel should drop to RMB 67,000-68,500/mt.